Personal loans provider warns against forecourt finance

Wed, 14 Mar 2007

Motorists may be left counting the cost if they opt for forecourt finance instead of a low-rate personal loan when purchasing a new vehicle, it has been suggested.

In a poll of people who plan to get financing support when buying a new motor, financial services specialist Alliance & Leicester Personal Loans has discovered that 26 per cent plan to go with the loan deal offered by the dealership.

Explaining the preference, a quarter of people in this group said that they believed forecourt finance was the cheapest way to purchase a car, ahead of alternatives such as arranging personal loans.

Commenting on the findings, the financial services provider's senior loans manager Richard Al-Dabbagh warned that this was often not the case.

"We are wasteful when choosing how to finance our new motor," he said. "Some car finance deals are well into double figures and should be given a wide berth."

Recently, a study from rival financial services provider AA Personal Loans revealed that people were planning to spend more on a new motor than before.

In a survey of car buyer intentions, the personal loans specialist found that drivers are planning to shell out £10,136 on a new vehicle in 2007, as opposed to an expected budget of £9,342 in 2006.

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